China, dragging down the rest of the world

“The Dow Jones Industrial Average and the S&P 500 just suffered their worst week since November 2011. On Friday, the Dow fell 531 points, or three percent; it shed more than 1,000 points this week. Other markets around the world also got shellacked; the Shanghai Composite dropped 4.3 percent on Friday, while the DAX, in Germany, closed down nearly 3 percent. Commodity prices are tanking; oil prices hit their lowest levels since 2009, below $40 a barrel. Now, there are fears that America’s six-year bull market could be heading for a correction. The culprit? Growing fears and evidence of an economic slowdown in China. The string of bad economic news out of Beijing continued Friday. The latest concerns came from China’s manufacturing sector, which shrunk to its lowest levels since 2009 during the Great Recession. This all comes after China devalued its currency last week, as year-over-year exports decreased by 8.3 percent in July and concerns grow that Beijing won’t hit its 7 percent growth target for 2015. Now, analysts are split over whether recent downward trends on global markets is a short-term scare or a larger sign of a global slowdown. For his part, Jim Chanos, an American hedge fund manager, who is president and founder of Kynikos Associates, said to brace for the worst”.